TIRANA, June.4 – The Finance Ministry has awarded the bid for the loan it requested of 230 million euro to finance construction of the Rr촨en-Kalimash road segment. This construction is part of the largest infrastructure project on the Durres-Kukes highway connecting Albania’s largest port to Kosovo’s capital. The best terms offered for the loan were from “Alpha” and “NBG Bank”.
From the 14 to the 25 of May, officials in the Finance Ministry examined all bids in order to determine the most cost effective bid for the 230 million euro needed to finance the Rr촨en-Kalimash construction project. The evaluation of the offers utilized the “Cash-Flow” and “Present Value” methods for each bid using the special software DMFAS, a well-know and widely accepted software program. This program is used worldwide by financial institutions and specifically assesses debt offerings.
The government has required permission from the IMF to finance the Durres-Morine highway with commercial loans, as it does not have the necessary funds in the budget to allocate to this important infrastructure project. In the future, a commercial debt of some 400 million euro will be difficult to manage and the real hardship will fall on Albanian taxpayers. The increase in the medium term debt risk is inevitable, according to experts, but the administration believes it is reasonable to carry by increasing the contingency fund by 1 percent of the GDP value.
Other measures will include the redirecting of funds from other projects to this one, as well as allocating some of the revenues from the privatization process to the road construction.
Competing Offers
Alpha Bank and National Bank of Greece (Syndicated loan)
Raiffeisen Group (Eurobond, option 2)
Citi Group ( Eurobond, option 2)
Deutsche Bank (Syndicated loan option 3, 1, 2)
Citi Group (Eurobond 1)
Raiffeisen Group (Eurobond1)
Citi Group (Syndicated loan 3)
Raiffeisen Group (Syndicated loan 2)
Citi Group (Syndicated loan 2)
Raiffeisen Group (Syndicated loan 1)
London Capital Market
International Commercial Bank
Pireus bank, Calyon, City Group (Syndicated loan 1), BNP Paribas
American bank of Albania
Interest rates
After considering all offers, the Finance Ministry awarded the bid to the syndicated loan of “Alpha Bank” and “National Bank of Greece” which fulfills the conditions of offering 15 years of tenure with 5 years of grace and distributes the necessary money at a quarterly interest rate of + 1,25 percent.
